Clarifying have and have not city calculations

Just a few quick points in response to several emails I received on my latest G&M post. First, here is the full table of all CMA and CA areas for the reliance on government transfer income and average income tax contribution.

I also want to say that I am not drawing any conclusions here about the government transfer income per se. All government transfer income – CPP, OAS, EI, workers’ comp, social assitance, child tax credits, etc. is there for a reason. That debate is for another day. I am just saying that the ratio between employment income and government transfer income matters. The national average is 18 cents worth of government transfer income per $1.00 of employment income. As is shown in the chart, there are now many communities in the 25, 30 and up to 72 cents range (Elliot Lake).

I think most people would agree there is some threshold where this ratio starts to become a problem. Is it 20 cents? 30 cents 40 cents? All I am saying is that we are there already with a number of communities and those same communities – for the most part – also contribute well below average income tax revenues. That was my definition of a ‘have not’ community – well above average reliance on government transfer income and well below contribution to income taxes.

To those who think the analysis was ‘high level’ – I agree. These columns are a place to discussion issues and trends – not to fully exhaust a large scale public policy issue.

I think this type of analysis is needed and should be part of our debate.

One Response to Clarifying have and have not city calculations

The amounts of transfers seem to be directly related to demographics. Elliot Lake is a retirement community and so I would expect that most residents would be receiving CPP & OAS while Wood Buffalo is very much a work camp for the oil fields and so I doubt that anybody retiring or on assistance would stay around.
Some correction for these demographic realities would be needed before we can claim that a certain threshold is problematic.

Do these transfer figures include equalization & health transfers? I would have thought that the NB cities would have had a positive tax per taxfiler.